Introduction

Most current restaking protocols employ a complex design where users must delegate stakes to operators before they can be assigned to Actively Validated Services (AVS).

While this approach offers flexibility for service integration, it presents significant usability challenges:

1. Indirect restaking: Users cannot restake directly into a service; they must first choose an operator.
2. Diversification complexity: Operators diversify their AVS operations and actively select which AVS to support, making users’ staked assets inherently diversified and actively managed.
3. Risk assessment difficulties: The complexity of this system makes it challenging for users to accurately measure risk and reward when evaluating restaking decisions.

To enhance the user experience and improve restaking efficiency, we have designed a direct and liquid restaking framework that allows users to choose an AVS directly and restake their assets to secure it, simplifying the process and providing clearer risk/reward assessments.

​

Direct Liquid Restaking

Direct Liquid Restaking is implemented through an Automated Operator Selection process built on top of the native restaking interface.

This system offers several key features:

1. Automated Operator Selection: Instead of users manually choosing an operator, a smart contract automatically calculates each operator’s contribution to the chosen AVS’s security. A security contribution threshold is introduced to identify high-concentration operators for a given AVS.

   We offer both Automated Operator Selection, which diversifies stakes across multiple operators, and a protocol-operated option for single-AVS restaking with higher yields through operator fee rebates.

2. Pooled Stake Management: User stakes are pooled and programmatically allocated to selected operators. The pool dynamically rebalances operator selection as operators move above or below the security contribution threshold.

3. Automatic Compounding: Rewards are automatically compounded to maximize yield generation.

4. Liquid Token Generation: Users receive a liquid token representing their restaking position in a specific AVS. This token can be freely traded or utilized in various DeFi activities, such as loans or actively managed strategies.

This approach streamlines the restaking process, optimizes security distribution, and provides users with flexible options for managing their staked assets.